Item 3. Legal Proceedings
ITEM
3.
LEGAL
PROCEEDINGS.
We
have been party to certain legal proceedings that have arisen in the ordinary course of our business and have been incidental to our
business. Certain of the claims that have been made against us allege, among other things, breach of contract or breach of express and
implied warranties with regard to our products. Although litigation is inherently uncertain, and we believe we are insured against many
such instances, based on past experience and the information currently available, management does not believe that any currently pending
and threatened litigation or claims will have a material adverse effect on our financial position, liquidity or results of operations.
However, future events or circumstances, currently unknown to management, will determine whether the resolution of pending or threatened
litigation or claims will ultimately have a material effect on our financial position, liquidity or results of operations in any future
reporting periods.
In
August 2020, a purported securities class action lawsuit, captioned Bush v. Blink Charging Co. et al., Case No. 20-cv-23527, was filed
in the United States District Court for the Southern District of Florida against the Company, Michael Farkas (Blink’s former Chairman
of the Board and Chief Executive Officer), and Michael Rama (Blink’s Chief Financial Officer) (the “Bush Lawsuit”).
In September 2020, another purported securities class action lawsuit, captioned Vittoria v. Blink Charging Co. et al., Case No. 20-cv-23643,
was filed in the United States District Court for the Southern District of Florida against the same defendants and seeking to recover
the same alleged damages. Following consolidation of the two actions and the court appointing Tianyou Wu, Alexander Yu and H. Marc Joseph
to serve as the Co-Lead Plaintiffs, the Co-Lead Plaintiffs filed an Amended Complaint in February 2021. The Amended Complaint alleged,
among other things, that the defendants made false or misleading statements about the size and functionality of the Blink Network and
asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. In April 2021, Blink and the other defendants
filed a motion to dismiss the Amended Complaint. In November 2023, the court dismissed Co-Lead Plaintiffs’ claims relating to the
size of Blink’s charging network and denied the remainder of the motion to dismiss. Following a mediation in April 2024, the parties
agreed to the terms of a settlement in which the Defendants agreed to pay $3,750 (inclusive of attorneys’ fees and administrative
costs) in exchange for the dismissal with prejudice of all claims. On October 21, 2024, the Court held a final settlement hearing, approved
the settlement, dismissed the Bush Lawsuit with prejudice, and closed the case. The full settlement amount has been paid by the Company’s
Directors’ and Officers’ insurance policies.
In
September 2020, a shareholder derivative lawsuit, captioned Klein (derivatively on behalf of Blink Charging Co.) v. Farkas et al., Case
No. 20-19815CA01, was filed in Miami-Dade County Circuit Court seeking to pursue claims belonging to the Company against Blink’s
Board of Directors and Michael Rama (the “Klein Lawsuit”). Blink is named as a nominal defendant. The Klein Lawsuit asserted
that the Director defendants caused Blink to make the statements at issue in the securities class action and, as a result, the Company
incurred costs defending against the Bush Lawsuit and other unidentified investigations. The Klein Lawsuit asserted claims against the
Director defendants for breach of fiduciary duties and corporate waste and against all of the defendants for unjust enrichment. Klein
did not quantify the alleged damages in his complaint, but he sought damages sustained by the Company as a result of the defendants’
alleged breaches of fiduciary duties, corporate governance changes, restitution, and disgorgement of profits from the defendants and
attorneys’ fees and other litigation expenses. In December 2020, another shareholder derivative action, captioned Bhatia (derivatively
on behalf of Blink Charging Co.) v. Farkas et al., Case No. 20-27632CA01, was filed in Miami-Dade County Circuit Court against the same
defendants in the Klein Lawsuit and asserted similar claims, as well as additional claims relating to the Company’s nomination,
appointment and hiring of minorities and women and the Company’s decision to retain its outside auditor (the “Bhatia Lawsuit”).
In June 2022, the court consolidated the Klein and Bhatia actions under the caption In re Blink Charging Company Stockholder Derivative
Litigation, Lead Case No. 2020-019815-CA-01. In February 2022, a shareholder derivative lawsuit, captioned McCauley (derivatively on
behalf of Blink Charging Co.) v. Farkas et al., Case No. A-22-847894-C, was filed in Clark County, Nevada seeking to pursue claims belonging
to the Company against Blink’s Board of Directors and Michael Rama (the “McCauley Lawsuit”). Blink is named as a nominal
defendant. The McCauley Lawsuit asserted similar claims and sought similar damages as the Klein Lawsuit. Following a mediation in April
2024, the parties entered into a Stipulation and Agreement of Settlement (the “Settlement”) dated June 26, 2025. The Settlement
resolves the Derivative Actions in exchange for the Company undertaking certain corporate governance reforms, but does not require the
director defendants to make any monetary payment as part of the Settlement. The Settlement includes a fee and expense award to plaintiffs’
counsel in the amount of $533 (the “Fee and Expense Award”), which the Company’s insurance carriers have paid.
On September 29, 2025, plaintiffs’ counsel in the Derivative Actions filed a motion asking the Nevada court to grant final approval
of the Settlement. On October 24, 2025, the Nevada court granted the motion. On October 29, 2025, the Nevada court issued an order and
final judgment, approving the settlement and closing the case. On December 4, 2025, plaintiffs in the Florida Action filed a notice of
voluntary dismissal with prejudice and the case was closed.
The
Farkas Group, Inc. (“FGI”), a Florida corporation whose principal is former Company CEO, Michael D. Farkas, filed a demand
for arbitration on April 1, 2024, alleging that the Company owes FGI commissions pursuant to a November 17, 2009 commission agreement
between the parties. The Company filed an answer denying the claim and counterclaimed against FGI, Mr. Farkas, and one of his companies,
NextNRG Holdings (“NEXT”), alleging that FGI, Mr. Farkas, and NEXT are in violation of non-compete agreements. NEXT later
filed a petition with the Florida Superior Court to stay the arbitration as to NEXT. The Florida Court denied NEXT’s petition,
and the arbitration resumed in March 2025. The arbitration hearing occurred in August 2025. In October 2025, the Arbitrator issued an
interim award which requires the Company to provide an accounting within 90 days applying the Arbitrator’s determinations regarding
the Commission Agreement. The Company anticipates that the accounting will result in a final award of less than $100 with an ongoing
obligation to pay a de minimis monthly amount that is expected to decline to zero over time. The Arbitrator denied the Company’s
claim for injunctive relief. The Arbitrator declined to award attorneys’ fees to either party.
In
January 2026, the Company received a letter from the law firm Kaliel Gold PLLC dated November 19, 2025 notifying that the law firm
intended to initiate consumer arbitrations before the American Arbitration Association on behalf of approximately 230 people.
According to Kaliel Gold PLLC’s letter, the Company allegedly fails to disclose certain third-party fees and the price of its
charging services. The Company has recently commenced an investigation and has not yet made any assessment as to whether the Company
has engaged in any of the challenged activities. The Company is unaware of any proceedings, arbitration or otherwise, that have
actually been commenced. As the Company has only recently learned of these potential claims, the Company cannot yet determine the
potential exposure of the Company, the validity of the allegations or whether the allegations rise to the level of
materiality.
ITEM
4.
MINE
SAFETY DISCLOSURES.
Not
applicable.
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PART
II